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central bank digital currency (CBDC)
Quote: "Additionally, because a CBDC would be digital and programmable, rules could be imposed that limit spending on approved activities. So, if the federal government or Federal Reserve were to determine that Americans are buying too much gasoline, for example, it could stop people from using CBDCs at gas stations with a few clicks on a computer.
Perhaps most disturbing of all, however, is that under most of the CBDC designs discussed by the Biden administration and Federal Reserve, nearly all forms of ownership of CBDC money would also be strictly limited. Only large institutions such as banks, the federal government, and/or the Federal Reserve would actually have ownership of CBDCs. Everyone else would be prevented from having absolute control over their digital money."
https://www.msn.com/en-us/money/markets/biden-administration-is-quietly-planning-for-a-future-where-you-don-t-own-money/ar-AA1aiOXO?ocid=msedgdhp&pc=U531&cvid=349e497104bc48d48bf422924a3d3138&ei=23
And all at the same time the LP continues to grow! The larger it grows in time the less likely the JPS order of the capital Stack matters. WIPE OUT
Write about the real enemy, the Treasury Department!
Barron Quote: “They are only true if the illegal actions of Treasury and its subservient FHFA are not eventually overturned.”
Kthomp19 Quote: “Overturned by whom? I don't see how any existing lawsuit can have that result, and anyone wanting to file a new lawsuit had better hurry the hell up.”
Link: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171706295
WE ARE RUNNING OUT OF TIME
In my opinion Barron has the best approach, The Charter Act! Challenging the illegal contract SPSPA. somebody better hurry up and file before we run out of time!
The Senior Preferred Stock Purchase Agreement is not a law: The SPSPA is an illegal contract: The Charter Act is the Law.
SUBSECTION (g) TEMPORARY AUTHORITY OF TREASURY TO PURCHASE OBLIGATIONS AND SECURITIES; CONDITIONS.— EMERGENCY DETERMINATION REQUIRED. Page 16
Under this subsection the FHFA / Treasury would have to prove, 'What was the Emergency'...
(And this will open the door for the plaintiffs to bring out the forced write down of the deferred tax assets, treasury's charge of an illegal commitment fee, violated the law by not adding the liabilities onto the national debt, neither entity met any of the twelve conditions for conservatorship spelled out in the newly passed HERA legislation, 5th amendment, 14th amendment, etc...)
There was no 'Emergency.'
FHFA freely admitted the companies were adequately capitalized, evidence the companies exceeded capital requirements absolutely no need for emergency funding.
SECOND QUARTER CAPITAL RESULTS
Minimum Capital
Fannie Mae’s FHFA-directed capital requirement on June 30, 2008 was $37.5 billion and its statutory minimum capital requirement was $32.6 billion. Fannie Mae’s core capital of $47.0 billion exceeded the FHFA-directed capital requirement by $9.4 billion.
Freddie Mac’s FHFA-directed capital requirement on June 30, 2008 was $34.5 billion and its statutory minimum capital requirement was $28.7 billion. Freddie Mac’s core capital of $37.1 billion exceeded the FHFA-directed minimum capital requirement by $2.7 billion.
Link:https://www.fhfa.gov/mobile/Pages/public-affairs-detail.aspx?PageName=FHFA-Announces-Suspension-of-Capital-Classifications-During-Conservatorship-and-Discloses-Minimum-and-RiskBased-Cap.aspx
https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.pdf
Quote:” calabria had plans in place -- all the leg work has been done, just need to update the numbers, fannie mae could do an equity offering in ~90 days if treasury was serious about it.”
Key words “had plans”…
Do not be deceived about the order of the capital stack. There is a very likely possibility the JPS will be wiped out.
Again,
The Treasury can choose to procrastinate to the point everyone gets wiped out. It’s been 15 years.
The JPS Shareholders are not protected with a kind of special immunity based on the order of the capital stack. Do not be deceived.
Our Friend Chessmaster stated, “ Profitable companies are not liquidated, and put in bankruptcy. FNMA is highly profitable.”
Profitable companies are not put into conservatorship either??
I read on this board, “JPS Shareholders may take a haircut, (not full par value)” …. Ha
The Senior Preferred Liquidation Preference at $290 billion and GROWING, both JPS Shareholders as well as the Common, both will be wiped out? We're running out of time... The longer the Snakes at the FHFA / Treasury can push this out into time the more claims on monies can be stolen!
All monies go to the Treasury. This will wipe out both common and the JPS??
Risk Factors Summary
GSE and Conservatorship Risk
Quote: "Our business activities are significantly affected by the senior preferred stock purchase agreement. Our regulator is authorized or required to place us into receivership under specified conditions, which would result in our liquidation. Amounts recovered by our receiver may not be sufficient to pay claims outstanding against us, repay the liquidation preference of our preferred stock or to provide any proceeds to common shareholders." End of Quote Page 33
Link: https://www.fanniemae.com/media/46276/display
"In the event the assets legally available for distribution to stockholders are insufficient to pay the liquidation preference of all Preferred Stock in full, the assets available for distribution will be divided among all holders of Preferred Stock on a pro rata basis, based on the value of the liquidation preference of each series of Preferred Stock." Page 5
Link: https://www.sec.gov/Archives/edgar/data/310522/000031052220000121/descriptionofsecuritie.htm
In my opinion Barron has the best approach, The Charter Act! Challenging the illegal contract SPSPA. It was also stated on this board, “somebody better hurry up and file before we run out of time!”
The JPS Shareholders are not protected with a kind of special immunity based on the order of the capital stack. Do not be deceived.
Our Friend Chessmaster stated, “ Profitable companies are not liquidated, and put in bankruptcy. FNMA is highly profitable.”
Profitable companies are not put into conservatorship either??
I read on this board, “JPS Shareholders may take a haircut, (not full par value)” …. Ha
The Senior Preferred Liquidation Preference at $290 billion and GROWING, both JPS Shareholders as well as the Common, both will be wiped out? We're running out of time... The longer the Snakes at the FHFA / Treasury can push this out into time the more claims on monies can be stolen!
All monies go to the Treasury. This will wipe out both common and the JPS??
Risk Factors Summary
GSE and Conservatorship Risk
Quote: "Our business activities are significantly affected by the senior preferred stock purchase agreement. Our regulator is authorized or required to place us into receivership under specified conditions, which would result in our liquidation. Amounts recovered by our receiver may not be sufficient to pay claims outstanding against us, repay the liquidation preference of our preferred stock or to provide any proceeds to common shareholders." End of Quote Page 33
Link: https://www.fanniemae.com/media/46276/display
"In the event the assets legally available for distribution to stockholders are insufficient to pay the liquidation preference of all Preferred Stock in full, the assets available for distribution will be divided among all holders of Preferred Stock on a pro rata basis, based on the value of the liquidation preference of each series of Preferred Stock." Page 5
Link: https://www.sec.gov/Archives/edgar/data/310522/000031052220000121/descriptionofsecuritie.htm
In my opinion Barron has the best approach, The Charter Act! Challenging the illegal contract SPSPA. It was also stated on this board, “somebody better hurry up and file before we run out of time!”
Okay, I understand.
This is what I am reading in the 10K...
I have a question: "required to place us into receivership under specified conditions."
What are the specific conditions? If the LP continues to grow, seems to me the company will be unable to pay off the LP under specified conditions at any time into the future? Unless the LP is cancelled the company will never have enough money to pay. Both common and JPS wiped out?
Risk Factors Summary
GSE and Conservatorship Risk
Quote: "Our business activities are significantly affected by the senior preferred stock purchase agreement. Our regulator is authorized or required to place us into receivership under specified conditions, which would result in our liquidation. Amounts recovered by our receiver may not be sufficient to pay claims outstanding against us, repay the liquidation preference of our preferred stock or to provide any proceeds to common shareholders." End of Quote Page 33
Link: https://www.fanniemae.com/media/46276/display
The Senior Preferred Liquidation Preference at $290 billion and GROWING, both JPS Shareholders as well as the Common, both will be wiped out? We're running out of time...
On the link provided, seems to me if the liquidation preference of the SPS keeps growing and the SPS is not cancelled, the legally available assets for distribution will not be enough to distribute to stockholders both JPS and common. All monies go to the Treasury. This will wipe out both common and the JPS?
"In the event the assets legally available for distribution to stockholders are insufficient to pay the liquidation preference of all Preferred Stock in full, the assets available for distribution will be divided among all holders of Preferred Stock on a pro rata basis, based on the value of the liquidation preference of each series of Preferred Stock." Page 5
Link: https://www.sec.gov/Archives/edgar/data/310522/000031052220000121/descriptionofsecuritie.htm
Chessmaster, I have a question?
On the link you provided, seems to me if the liquidation preference of the SPS keeps growing and the SPS is not cancelled, the legally available assets for distribution will not be enough to distribute to stockholders both JPS and common. All monies go to the Treasury. This will wipe out both common and the JPS?
"In the event the assets legally available for distribution to stockholders are insufficient to pay the liquidation preference of all Preferred Stock in full, the assets available for distribution will be divided among all holders of Preferred Stock on a pro rata basis, based on the value of the liquidation preference of each series of Preferred Stock." Page 5
Link: https://www.sec.gov/Archives/edgar/data/310522/000031052220000121/descriptionofsecuritie.htm
Thank you Barron
I wouldn't call $2.25 billion a backstop on a 6 trillion business.
PURCHASE OF OBLIGATIONS BY TREASURY; CONDITIONS AND RESTRICTIONS
The Secretary of the Treasury shall not at any time purchase any obligations under this subsection if such purchase would increase the aggregate principal amount of the Secretary’s, then outstanding holdings of such obligations under this subsection to an amount greater than $2,250,000,000.
Link: https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.pdf
Quote: “Former Wells Fargo Chairman and CEO Dick Kovacevich says the federal government's bank bailout during the depths of the financial crisis was an unmitigated disaster and laid much of the blame for the financial crisis on ineffective regulators.
The decision by the U.S. Treasury and the Federal Reserve in October 2008 to make banks take TARP money even if they didn't want it or need it was one of the worst economic decisions in the history of the United States, Kovacevich.” End of Quote.
Quote: “Kovacevich said some might ask, Why didn't I just say no and not accept the TARP money? As my comments were heading in that direction in the meeting, Hank Paulson turned to Fed Chairman Ben Bernanke sitting next to him and said, Your primary regulator is sitting right here. If you refuse to accept these funds, he will declare you capital deficient Monday morning. Kovacevich recalled, Is this America? I ask myself.” End of Quote.
Link: https://www.bizjournals.com/sanfrancisco/blog/2012/06/wells-fargo-dick-kovacevich-occupy-tarp.html
The term ‘quasi government agency’...
Government Sponsored Enterprise (GSE), the misconception of the meaning of the charter relating to Fannie Mae and Freddie Mac.
GSE’s Government Charter
Think about the charter like this, the ‘Charter’ is a license provided to a private shareholder owned corporation, ( government contractor ), providing liquidity in the secondary mortgage market. Another example: The Federal Reserve is a privately shareholder owned corporation, a contractor for the U.S. Government.
The government charter is none other than a government license given to Fannie and Freddie to operate the businesses in the secondary market, that’s it! The government had no equity ownership in the GSEs before the conservatorship. The government does regulate the GSEs with rules whereby Fannie and Freddie can operate in the secondary market. Just as the city, I operate my personal business, the city has no ownership in the business, but charges a yearly license fee to operate with rules and regulations whereby my business can operate. Nothing more nothing less...
The United States Taxpayer was under no obligation to back the GSEs. The Taxpayers became obligated at the point in time of conservatorship.
One more..,
Quote: “It is well enough that people of the nation do not understand our banking and money system, for it they did, I believe there would be a revolution before tomorrow morning.” End of Quote
Henry Ford Founder the Ford Motor Company
1963 US Treasury Notes Issues $4.3 Billion in Interest Free, Debt Free Treasury Notes - First Time since Lincoln in 1862 that a President Issues Debt Free “Greenback” Treasury Notes -
1963 President Kennedy United States President 1961 – 1963
On June 4th 1963, President Kennedy signed a presidential document, called Executive Order 11110. It gave the Treasury Department the explicit authority: “to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury.” Five months after Kennedy's assassination all Series 1958 “Silver Certificates” were removed from circulation.
Quantitative easing (QE)
The power to create deposits.
Quote: “Banking was conceived in iniquity and was born in sin. The Bankers own the Earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take away from them, and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a happier and better world to live in. But if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits.” End of Quote
Sir Josiah Stamp President of the Bank of England in the 1920's
Robert, I wrote this back in 2018.
Regards
QUANTITATIVE EASING FACILITATING THEFT
The large scale purchase of Treasury Securities, Agency Mortgage-Backed Securities and Agency Debt by the Federal Reserve, commonly known as quantitative easing (QE), is one of the most dramatic events in history of the United States. At the start of late November of 2008, the Federal Reserve started buying Mortgage-Backed Securities and continuing these purchases to 29 October 2014 and at the end of this bond-buying program the Federal Reserve had purchased an astounding $4.5 Trillion from banks in newly created U.S. Dollars at the expense of the United States Taxpayer.
PRIMARY DEALERS WHO RECEIVED THE FRESHLY CREATED CASH FROM THE FED.
Primary dealers recognized by the Federal Reserve Bank of New York; In the first half of February, 2, 2011, there were 18 primary dealers, including;
BNP Paribas Securities Corp (BNP Paribas), Bank of America Securities LLC (BOA), Barclays Capital Inc (Barclays Capital), Cantor Fitzgerald & Co (Cantor Fitzgerald), Citigroup Global Markets Inc (Citigroup), Credit Suisse Securities USA LLC (Credit Suisse), Daiwa Securities America Inc (Daiwa), Deutsche Bank Securities Inc (Deutsche Bank), Goldman Sachs & Co (Goldman Sachs), HSBC Securities USA Inc (HSBC), Jefferies & Company, Inc (Jefferies), J. P. Morgan Securities Inc (J. P. Morgan), Mizuho Securities USA Inc (Mizuho), Morgan Stanley & Co. Incorporated (Morgan Stanley), Nomura Securities International, Inc (Nomura), RBC Capital Markets Corporation (RBC), RBS Securities Inc (RBS), and UBS Securities LLC (UBS).
Quantitative easing is counterfeiting it's theft and if private citizen's did it they would go to prison. Ignorant politicians consistently spend more money then they can raise and they borrow and worse create money with central banks. Doing that as a private citizen is a criminal offense. Financial regulations have become a shield to protect crooked bankers while politicians and central banks spend money they do not have by simply creating it.
They're stealing our money. Degrading our money is what the Federal Reserve does by degrading their debt but it degrades our savings. Massive money creation effectively produces inflation impoverishing those in society who should be helped. It's theft from the taxpayer and until central bankers and politicians are sent to prison for this theft it will continue.
Quote: “Whoever controls the volume of money in any country is absolute master of all industry and commerce... And when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.” End of Quote: James A. Garfield President of the United States 1881.
I think the free market would take care of it self. And instead of the United States Taxpayers left holding the bag, Wall Street firms would be holding the bag. Quantitative easing (QE) Is a fancy term used by the Central Bank to steal from the Taxpayers. After 2008 over 4 Trillion dollars was added to the national debt for the bailout of banker buddies. That’s what I think.
Best Regards
From our friend Donotunderstand.
Quote: “an implicit guarantee is worth the paper it is not written on.” End of Quote
Quote: “Then it went private with no statement on guarantee but with its legacy (Guarantee) and huge monster size - people assumed it was guaranteed. The so called Implicit guarantee.
Note - as a broker-advisor - when I sold FNMA paper to clients it was required that I note that it did not have a guarantee from the GOV or even an executive branch guarantee (which is less than Treasury) . It did have a super private sector rating agency rating !!” End of Quote
Let me be more specific: Under the terms of the Charter Act the Treasury was given a limit of $2.25 billion, to purchase obligations (page 14 charter act).
FEDERAL NATIONAL MORTGAGE ASSOCIATION CHARTER ACT
Authority of Treasury to Purchase Obligations
PURCHASE OF OBLIGATIONS BY TREASURY; CONDITIONS AND RESTRICTIONS
The Secretary of the Treasury shall not at any time purchase any obligations under this subsection if such purchase would increase the aggregate principal amount of the Secretary’s, then outstanding holdings of such obligations under this subsection to an amount greater than $2,250,000,000.
Link: https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.pdf
With the passage of HERA Legislation: (purchase obligations increased with an expiration date of December 31, 2009).
SEC. 1117. TEMPORARY AUTHORITY FOR PURCHASE OF OBLIGATIONS OF REGULATED ENTITIES BY SECRETARY OF TREASURY.
The HERA legislation granted temporary authority to the Treasury to purchase obligations of the Enterprise, above the limits written in the Charter, (Charter limitation of 2.25 billion) up to the point in time of ‘‘(4) TERMINATION OF AUTHORITY.—The authority under this subsection (g), with the exception of paragraphs (2) and (3) of this subsection, shall expire December 31, 2009.
Link: https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
Fannie Mae securities received no actual explicit or implicit government guarantee, (other than $2.25 billion), after 1968 up to the point in time of the signing of the conservatorship.
"The U.S. Government does not guarantee, directly or indirectly, our securities or other obligations." ... (Implicit is not worth the paper it WAS NOT WRITTEN ON).
The United States was not obligated after 1968 to back any debt of Fannie Mae. The United States Taxpayers became obligated when the government took over the two companies.
Originally, Fannie Mae had an explicit guarantee from the United States government; if the entity got into financial trouble the government promised to bail it out. This changed in 1968. Fannie Mae became a private stockholder owned company. Fannie Mae securities received no actual explicit or implicit government guarantee. This is clearly stated in the securities themselves, and in many public communications issued by Fannie Mae.
Quote: “Although we are a corporation chartered by the U.S. Congress, the U.S. Government does not guarantee, directly or indirectly, our securities or other obligations. We are a stockholder-owned corporation, and our business is self-sustaining and funded exclusively with private capital. Our common stock is listed on the New York Stock Exchange and traded under the symbol “FNM.” Our debt securities are actively traded in the over-the-counter market.” End of Quote.
Information from: Fannie Mae form 10K Dec 31, 2007
part I, page 1, item 1.
https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/ir/pdf/quarterly-annual-results/2007/form10k_022708.pdf
I have no idea why this posted two times...
Fannie Mae securities received no actual explicit or implicit government guarantee.
"The U.S. Government does not guarantee, directly or indirectly, our securities or other obligations." ... (Implicit is not worth the paper it WAS NOT WRITTEN ON).
The United States was not obligated after 1968 to back any debt of Fannie Mae. The United States Taxpayers became obligated when the government took over the two companies.
Originally, Fannie Mae had an explicit guarantee from the United States government; if the entity got into financial trouble the government promised to bail it out. This changed in 1968. Fannie Mae became a private stockholder owned company. Fannie Mae securities received no actual explicit or implicit government guarantee. This is clearly stated in the securities themselves, and in many public communications issued by Fannie Mae.
Quote: “Although we are a corporation chartered by the U.S. Congress, the U.S. Government does not guarantee, directly or indirectly, our securities or other obligations. We are a stockholder-owned corporation, and our business is self-sustaining and funded exclusively with private capital. Our common stock is listed on the New York Stock Exchange and traded under the symbol “FNM.” Our debt securities are actively traded in the over-the-counter market.” End of Quote.
Information from: Fannie Mae form 10K Dec 31, 2007
part I, page 1, item 1.
https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/ir/pdf/quarterly-annual-results/2007/form10k_022708.pdf
Concrete Life Preserver
Deferred Tax Assets fabricated losses...
FHFA and Treasury engineered these large and early losses deliberately. But without these engineered losses, Fannie Mae would never have run out of capital, and would have survived the financial crisis stronger than ever.
Fannie Mae
Form 10K For the fiscal year ended December 31, 2009
Quote: “The aggregate liquidation preference on the senior preferred stock will be $76.2 billion, which will require an annualized dividend of approximately $7.6 billion. This amount exceeds our reported annual net income for all but one of the last eight years, in most cases by a significant margin. Our senior preferred stock dividend obligation, combined with potentially substantial commitment fees payable to Treasury starting in 2011 (the amounts of which have not yet been determined) and our effective inability to pay down draws under the senior preferred stock purchase agreement, will have a significant adverse impact on our future financial position and net worth.” End of Quote Page 7
Link: https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/ir/pdf/quarterly-annual-results/2009/form10k_022610.pdf
Mr. Howard,
Quote: Once in conservatorship, the Companies’ managements had no role in negotiating the terms on which they would be offered assistance; Treasury and FHFA set these terms unilaterally. They included a requirement that any shortfalls in the Companies’ book capital be covered with “draws” of senior preferred stock that never could be repaid, meaning Fannie and Freddie had to pay a dividend to Treasury of 10 percent after-tax in cash, or 12 percent in kind, in perpetuity, on their highest amounts of senior preferred stock outstanding at any one time. This unprecedented non-repayment feature gave Treasury and FHFA an extremely strong incentive to make accounting choices for the Companies that accelerated or exaggerated their expenses and greatly increased their losses, in order to create a large and permanent flow of revenue to Treasury.
Between the time Fannie and Freddie were put into conservatorship and the end of 2011, well over $300 billion in non-cash accounting expenses were recorded on their income statements. These non-cash expenses, most of which were discretionary, eliminated all of the Companies’ capital and forced them, together, to take $187 billion from Treasury.
But because accelerated or exaggerated expenses cause losses that are only temporary, Fannie’s and Freddie’s non-cash losses began to reverse themselves in 2012. Coupled with profits resulting from a rebounding housing market, the reversal of these losses enabled both Companies to report in August 2012 sufficient second quarter income to not only pay their dividends to Treasury but also retain a total of $3.9 billion in capital.
As soon as it became apparent that a large percentage of the non-cash accounting losses booked during the previous four years was about to come back into income, Treasury and FHFA entered into the Third Amendment to the PSPA. The Third Amendment substituted for the fixed dividend payment a requirement that all future earnings—including reversals of accounting-related expenses incurred earlier—be remitted to Treasury. From the time the Third Amendment took effect through the end of 2014, Fannie and Freddie paid Treasury $170 billion, $133 billion more than they would have owed absent the Amendment.” End of Quote
Link: https://howardonmortgagefinance.com/2015/07/
Cumulative Dividends Paid by Both Enterprises
$301,045 ($ billions)... And calling for a Cram-Down!
Vancmike, I appreciate your contribution to our cause in our attempt to get out of this prison.
When giving consideration to the amount of the Treasury Draws and the amount of the Treasury payments. Fannie Mae had $47 billion in regulatory capital and was in full compliance with all of its statutory capital requirements on the day it was put into conservatorship and the senior preferred stock agreement was signed.
Deferred Tax Assets fabricated losses, the FHFA admits this fact in a foot note.
(From what I have read)
During the following 18 months, Fannie Mae’s actual credit-related losses—its loan charge-offs and foreclosed property expense— were just $16 billion. Virtually all the rest of its losses were accounting changes made by the company’s conservator, FHFA, that pulled into Fannie Mae’s 2008 and 2009 financial statements over $100 billion in "expenses" that, as it turns out, never occurred.
What I am reading, “FHFA took a $21 billion charge to set up a reserve against the company’s deferred tax assets, arguing that it would not earn enough in the future to realize their full value, and gave a similar reason for writing off $8 billion in low-income housing tax credits. FHFA also took $17 billion in impairments on the company’s private-label security holdings and put $56 billion into its reserve for future loan losses, increasing that to $66 billion on December 31, 2009.
FHFA and Treasury engineered these large and early losses deliberately. But without these engineered losses, Fannie Mae would never have run out of capital, and would have survived the financial crisis stronger than ever.'
Link: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=170005269
From the FHFA
Deferred Tax Assets fabricated losses, the FHFA admits this fact in a foot note on their own website. Well over $300 billion in non-cash accounting expenses were recorded on their income statements. These non-cash expenses, most of which were discretionary, eliminated all of the Companies’ capital and forced them, together, to take $187 billion from Treasury. Fabricated losses to make the companies appear bankrupted.
FROM NUMBER 1 FOOT NOTE FHFA WEBSITE: link below
NOTE: “UNREALIZED LOSSES”
Quote: “Both GAAP stockholders’ equity and GAAP net worth are measures of the difference between an Enterprise’s assets and liabilities. Both measures include realized and unrealized losses as of the reporting date. Losses ultimately realized in the future may differ from unrealized losses as of the reporting date.” End of Quote...
Quote: “Quote, "Excludes $1 billion in liquidation preference on the senior preferred stock position obtained by Treasury from each Enterprise upon initiation of the Senior Preferred Stock Purchase Agreement. The initial $1 billion is not a draw on the Treasury’s commitment under the agreement.” End of Quote.
Link: https://www.fhfa.gov/DataTools/Downloads/Documents/HPI/Market-Data/Table_1.pdf
In Addition, Mr. Howard Quote: “Because accelerated or exaggerated expenses cause losses that are only temporary, Fannie’s and Freddie’s non-cash losses began to reverse themselves in 2012. Coupled with profits resulting from a rebounding housing market, the reversal of these losses enabled both Companies to report in August 2012 sufficient second quarter income to not only pay their dividends to Treasury but also retain a total of $3.9 billion in capital. As soon as it became apparent that a large percentage of the non-cash accounting losses booked during the previous four years was about to come back into income, Treasury and FHFA entered into the Third Amendment to the PSPA.” End of Quote
One other point you made,
Quote:” Personally I do not think this part of the SPS can be challenged but the increase of the Liquidation Preference as part of the 3rd Amendment can. Let the UST have $ 2 bn and NO MORE.” End of Quote
I prefer Barron’s approach, void the entire contract, SPSPA contract. I understand, time limits. Barron mentioned, the new ruling by the SCOTUS a few days ago may offer an opportunity to bypass the letter agreement time table and go straight for the 2008 original contract.
Thank you,
Regards
Question, how much commitment money did Treasury actually deposit into the account of the companies? Money recorded on the balance sheet?
I understand,
No cash given there was consideration given because the UST agreed to provide up to $100 billion additional funding at the time to calm the MBS markets.
The FHFA gave the companies to the Treasury for a commitment of $100 billion, the day the SPSPA was signed, later date increasing to $200 billion, in addition, 79.9% ownership of the companies common stock. This took place when the FHFA freely admitted the companies were adequately capitalized. The Treasury paid no money.
The commitment was $100 billion increased to $200 billion before the cut off date in 2009, the cut off date to purchase obligations.
The U.S. Department of the Treasury (Treasury) provides Fannie Mae and Freddie Mac with financial support through the Senior Preferred Stock Purchase Agreements (SPSPAs), which were executed on September 7, 2008, one day after Fannie Mae and Freddie Mac entered conservatorships.
In exchange for Treasury’s financial support, the SPSPAs require Fannie Mae and Freddie Mac, among other things, to make quarterly dividend payments to Treasury, provide Treasury with a Liquidation Preference, and beginning in 2010 pay Treasury a periodic commitment fee that reflects the market value of the outstanding Treasury commitment, as well as Stock Warrants for the purchase of common stock representing 79.9% of the common stock of Fannie Mae and Freddie Mac, respectively, on a diluted basis.
On May 6, 2009, Treasury and the Enterprises amended the SPSPAs, increasing Treasury’s commitment of financial support from $100,000,000,000, respectively, to $200,000,000,000, respectively.
FOFreddie,
What am I missing here, anyone please help.
PURCHASE OF SENIOR PREFERRED STOCK AND WARRANT
What makes no sense it appears to be when the SPSPA took place no money changed hands from the Treasury Department on to the balance sheet of the companies; The Treasury paid no money on the purchase price.
non-cash activity,
If this is true?
The Treasury's illegal contract was never consummated, the Treasury paid us nothing, the purchase price of the contract was in the amount of $1 billion for purchase of One Million Shares (1,000,000) with an initial liquidation preference of $1,000 per share. Shares of senior equity in FNMA. It's all illegal and unconstitutional.
Our Friend Bryndon stated, “I'm pretty sure it was a non-cash activity.”
A non-cash activity, so in essence the FHFA gave away the companies for free with no cash added on to the balance sheet? A verbal transaction. Amazing!
If I am reading this wrong, someone help me.
Quote: “PURCHASE OF SENIOR PREFERRED STOCK AND WARRANT; FEES 3.1.
Initial Commitment Fee. In consideration of the Commitment, and for no additional consideration, on the Effective Date (or as soon thereafter as is practicable) Seller shall sell and issue to Purchaser, and Purchaser shall purchase from Seller, (a) one million (1,000,000) shares of Senior Preferred Stock, with an initial liquidation preference equal to $1,000 per share
($1,000,000,000 (one billion dollars) liquidation preference in the aggregate), and (b) the Warrant.” End of Quote Page 5
Link: https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/FNM/SPSPA-amends/FNM-SPSPA_09-07-2008.pdf
It is not just a poster on here... It is Barron, and he has been all over this board.
He is asking you to prove him wrong. If he can be proved wrong no need to file a suit, that is my understanding of why he posted the question...
Several Investors on this board has expressed to Barron the willingness to help him with $ ... But I have not read where he personally asked for $ ...
Barron asked, to anyone...
“This leads to the question, who authorized the appropriation of taxpayer debt to provide the 200 billion commitment? Certainly not Congress. Please someone show where Treasury was authorized by a law to make a 200 billion commitment available in exchange for One Million Shares (1,000,000) with an initial liquidation preference of $1,000 per share. Shares of senior equity in FNMA? It's all illegal and unconstitutional.”
Donotunderstand, I appreciate your contribution to our effort in getting out of this prison.
“time of emergency-near “war times” ?
Even in war time real property is compensated under the 5th...
“how do two judges come to the edge of saying we got screwed and then vote with the assailant”
It has been covered a dozen times on this board...
It was explained to you in the post you replied too.
“Quote: "This lawsuit does not challenge the foregoing arrangement made in September 2008. While Plaintiffs do not concede that all the measures taken in September 2008 were justified or necessary, they are not here to challenge the placement of Fannie and Freddie into conservatorship at the height of the financial crisis, or the original deal struck by Treasury and FHFA at that time." End of Quote. Page 7
The lawyers are focused on the third amendment net worth sweep. And IT IS NOT WORKING!
Again,
“Well, why didn't you bring a takings claim?”
JUSTICE BREYER: -- and this seems like a takings claim, why should we stretch out of recognition or stretch or try to draw lines unnecessarily on the question of derivative actions? Page 71
JUSTICE BREYER: I'm -- I'm aware of derivative action of the conservator. In fact, he so -- goes so far that the company's hurt, really hurt, and the shareholders are destroyed, bring a takings claim, but as long as there's a colorable claim, as long as there's a colorable defense, forget it. Apply ordinary derivative law. Page 71
JUSTICE BREYER: “FORGET IT” …
MR. THOMPSON: Your Honor, we have brought a takings claim, but that doesn't absolve this Court of -- under the APA, of addressing our challenge to the lawfulness of the agency action. There's no reason to think that – Page 70
Let me interpret MR. Thompson, Your Honor, I work for JPS Shareholders and these JPS Shareholders don't care about the company or the common shareholders, matter of fact we want the Treasury to cram-down, place the company in receivership or whatever it takes so we can collect Par Value on our investment! The Contract, first amendment, second amendment we don't care. My clients are asking this Court to draw a line in the sand (third amendment) with a 'colorable claim' so we can collect Par Value. JUSTICE BREYER: “FORGET IT” …
The question was asked on this board, “Why did Breyer vote along with the other Justices?” Ha
SUPREME COURT OF THE UNITED STATES
Justice Breyer told the Plaintiffs how to win!
UPMOST IMPORTANT: JUSTICE BREYER: Quote: “Thank you. I think in reading this you could, with trying to simplify as much as possible, do you -- the shareholders' claim as saying we bought into this corporation, it was supposed to be private as well as having a public side, and then the government nationalized it. That's what they did. If you look at their giving the net worth to Treasury, it's nationalizing the company. Now, whatever conservators do and receivers do, they don't nationalize companies. And when they nationalized this company, naturally they paid us nothing and our shares became worthless. And so what do you say?” End of Quote, page 12
Link: https://www.supremecourt.gov/oral_arguments/argument_transcripts/2020/19-422_3e04.pdf
DERIVATIVE. Coming from another; taken from something preceding, secondary; as derivative title, which is that acquired from another person. There is considerable difference between an original and a derivative title. When the acquisition is original, the right thus acquired to the thing becomes property, which must be unqualified and unlimited, and since no one but the occupant has any right to the thing, he must have the whole right of disposing of it. But with regard to derivative acquisition, it may be otherwise, for the person from whom the thing is acquired may not have an unlimited right to it, or he may convey or transfer it with certain reservations of right. Derivative title must always be by contract.
The lawyers are focused on the third amendment net worth sweep; IT IS NOT WORKING! By Public Law the whole contract is illegal, the contract is illegal based on the United States is not permitted to charge a commitment fee to be paid by the enterprises. The Senior Preferred Stock Purchase Agreement is not a law: The SPSPA is an illegal contract.
THE CHARTER ACT IS THE LAW
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171648502
stockanalyze, you asked what do we do with this information?
Barron has proposed to file a lawsuit against the Treasury in violation of the Charter Act, the conservatorship illegal. He asked us to help him.
Starting Point
Barron asked, Anyone?
“This leads to the question, who authorized the appropriation of taxpayer debt to provide the 200 billion commitment? Certainly not Congress. Please someone show where Treasury was authorized by a law to make a 200 billion commitment available in exchange for One Million Shares (1,000,000) with an initial liquidation preference of $1,000 per share. Shares of senior equity in FNMA? It's all illegal and unconstitutional.”
Page 5
Link: https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/FNM/SPSPA-amends/FNM-SPSPA_09-07-2008.pdf
The Senior Preferred Stock Purchase Agreement is not a law. The SPSPA is an illegal contract, The Charter Act is the Law.
FEDERAL NATIONAL MORTGAGE ASSOCIATION CHARTER ACT
As amended through July 25, 2019
link: https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.pdf
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
Link: https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
SENIOR PREFERRED STOCK PURCHASE AGREEMENT
Dated September 7, 2008.
link: https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/FNM/SPSPA-amends/FNM-SPSPA_09-07-2008.pdf
ALL THE AGREEMENTS
link: https://www.fhfa.gov/Conservatorship/Pages/Senior-Preferred-Stock-Purchase-Agreements.aspx
Barron Quote: “The statute of limitations will expire in 2025, 6 years from the 2019 letter agreement.”
Letter agreement link: https://home.treasury.gov/news/press-releases/sm786
I appreciate your continued support for our efforts. Hope Mr Kelly wins against this theft. Again, I believe Barron has the best approach with the ‘Charter Act’… Thanks for posting
You ask “So” ? Like in so what?
The Plaintiffs brought the wrong lawsuit to the SCOTUS!
This has been the MISTAKE of the JPS Lawyers from the beginning. And making the same mistake over and over.
UNITED STATES COURT OF FEDERAL CLAIMS
Wazee Street Opportunities Fund IV LP,
Filed 04/03/23
Quote: "This lawsuit does not challenge the foregoing arrangement made in September 2008. While Plaintiffs do not concede that all the measures taken in September 2008 were justified or necessary, they are not here to challenge the placement of Fannie and Freddie into conservatorship at the height of the financial crisis, or the original deal struck byTreasury and FHFA at that time." End of Quote. Page 7
The lawyers are focused on the third amendment net worth sweep. And IT IS NOT WORKING!
Link: https://storage.courtlistener.com/recap/gov.uscourts.uscfc.37252/gov.uscourts.uscfc.37252.30.0.pdf
IN THE SUPREME COURT OF THE UNITED STATES
JUSTICE SOTOMAYOR:
Quote: "I just want to make sure that I get the gist of your argument, and I think I have it right. I know you and the shareholders disagree on whether this deal had a reasonable cause, but let's posit a deal that didn't. For no rational base -- reason, the FHFA sold all of Fannie and Freddie's assets in exchange for one dollar to itself. It did exactly what Justice Breyer said. It nationalized things. It nationalized the company. Your position is that there is no court review of a decision by the FFH as conservator that could give shareholders the right to challenge their action?” End of Quote page 19
https://www.supremecourt.gov/oral_arguments/argument_transcripts/2020/19-422_3e04.pdf
Let's simplify this...
“FHFA sold all of Fannie and Freddie's assets in exchange for one dollar to itself.”
No Your Honor, the illegal contract was never consummated, the Treasury paid us nothing.
In addition:
Your Honor, The Senior Preferred Stock Purchase Agreement is not a law: The SPSPA is an illegal contract: The Charter Act is the Law.
SUBSECTION (g) TEMPORARY AUTHORITY OF TREASURY TO PURCHASE OBLIGATIONS AND SECURITIES; CONDITIONS.— EMERGENCY DETERMINATION REQUIRED. Page 16
Under this subsection the FHFA / Treasury would have to prove, 'What was the Emergency'...
(And this will open the door for the plaintiffs to bring out the forced write down of the deferred tax assets, treasury's charge of an illegal commitment fee, violated the law by not adding the liabilities onto the national debt, neither entity met any of the twelve conditions for conservatorship spelled out in the newly passed HERA legislation, 5th amendment, 14th amendment, etc...)
There was no 'Emergency.'
FHFA freely admitted the companies were adequately capitalized, evidence the companies exceeded capital requirements absolutely no need for emergency funding.
SECOND QUARTER CAPITAL RESULTS
Minimum Capital
Fannie Mae’s FHFA-directed capital requirement on June 30, 2008 was $37.5 billion and its statutory minimum capital requirement was $32.6 billion. Fannie Mae’s core capital of $47.0 billion exceeded the FHFA-directed capital requirement by $9.4 billion.
Freddie Mac’s FHFA-directed capital requirement on June 30, 2008 was $34.5 billion and its statutory minimum capital requirement was $28.7 billion. Freddie Mac’s core capital of $37.1 billion exceeded the FHFA-directed minimum capital requirement by $2.7 billion.
Link:https://www.fhfa.gov/mobile/Pages/public-affairs-detail.aspx?PageName=FHFA-Announces-Suspension-of-Capital-Classifications-During-Conservatorship-and-Discloses-Minimum-and-RiskBased-Cap.aspx
https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.pdf
A non-cash activity, so in essence the FHFA gave away the companies for free with no cash added on to the balance sheet? A verbal transaction. Amazing!
I have a question, when the SPSPA took place did any money change hands from the Treasury Department on to the balance sheet of the companies? Recorded in the amount of $1 billion?
Page 5
https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/FNM/SPSPA-amends/FNM-SPSPA_09-07-2008.pdf
Quote: “(3) FUNDING.—For the purpose of the authorities granted in this
subsection, the Secretary of the Treasury may use the proceeds of the sale of
any securities issued under chapter 31 of Title 31, and the purposes for
which securities may be issued under chapter 31 of Title 31 are extended to
include such purchases and the exercise of any rights in connection with
such purchases. Any funds expended for the purchase of, or modifications
to, obligations and securities, or the exercise of any rights received in
connection with such purchases under this subsection shall be deemed
appropriated at the time of such purchase, modification, or exercise.” End of Quote
THE ABOVE TAKE NOTE:
PURCHASES,
WITH SUCH PURCHASES,
EXPENDED FOR THE PURCHASE OF,
CONNECTION WITH SUCH PURCHASES,
AT THE TIME OF SUCH PURCHASE.
SEC. 304 Purchase Obligations
Subsection (c)
$200,000,000,000 (two hundred billion dollars): This amount of money is construed as a commitment from the Treasury, a line of credit, backstop, this money was not used to purchase anything. What did the $200 billion buy? NOTHING
This money was not used to purchase obligations of Fannie Mae as permitted in the HERA legislation under terms as defined by the changes of the company's Charter Act by HERA.
The HERA legislation granted temporary authority to the Treasury to purchase obligations of the Enterprise, above the limits written in the Charter, (Charter limitation of 2.25 billion).
Therefore, the FHFA was not given authority by Congress to enter into contract with the United States Treasury in the amount of $200,000,000,000 (two hundred billion dollars): This amount of money is construed as a commitment from the Treasury, a line of credit, backstop.
Neither the Charter Act nor did HERA authorize the Treasury to charge a commitment fee on a line of credit to be paid by the Enterprise. The United States prohibition on assessment or collection of fee or charge to Fannie Mae, (section 304 Fee Limitation). Only Federal Reserve Banks are authorized to be reimbursed of fees, (section 309).
SEC. 304. SECONDARY MARKET OPERATION
Fee Limitation
Quote: “(f) PROHIBITION ON ASSESSMENT OR COLLECTION OF FEE OR CHARGE BY UNITED STATES.—Except for fees paid pursuant to section 309(g) of this Act and assessments pursuant to section 1316 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, no fee or charge may be assessed or collected by the United States (including any executive department, agency, or independent establishment of the United States) on or with regard to the purchase, acquisition, sale, pledge, issuance, guarantee, or redemption of any mortgage, asset, obligation, trust certificate of beneficial interest, or other security by the corporation. No provision of this subsection shall affect the purchase of any obligation by the Secretary of the Treasury pursuant to subsection (c) of this section.” End of Quote. Page 16
Only Federal Reserve Banks are authorized to be reimbursed of fees, (section 309).
SEC. 309. GENERAL POWERS OF GOVERNMENT NATIONAL MORTGAGE ASSOCIATION AND FEDERAL NATIONAL MORTGAGE ASSOCIATION
Federal Reserve Banks to Act as Fiscal Agents (Fannie Mae and GNMA)
Quote: “(g) DEPOSITARIES, CUSTODIANS, AND FISCAL AGENTS.—The Federal Reserve banks are authorized and directed to act as depositaries, custodians, and fiscal agents for each of the bodies corporate named in section 302(a)(2), for its own account or as fiduciary, and such banks shall be reimbursed for such services in such manner as may be agreed upon; and each of such bodies corporate may itself act in such capacities, for its own account or as fiduciary, and for the account of others.” End of Quote. Page 29
https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.pdf
https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
NeoSunTzu,
Saw the term on this board.
Regards
Had to edit to meet community standards.
‘LEGACY COMMONS’
I would like to ask each investor to kindly share your personal thoughts.
Quote: “New investors want the existing common to be diluted as much as possible The more dilution, the more money for the new investors. Leaving anything behind for legacy commons (more than what is absolutely necessary, which might be a nickel per share) is what would be stupid.” End of Quote
This could easily be settled where each equity holder could come out of this conservatorship to some degree satisfied. If a secondary IPO is necessary to meet the capital requirements new investors can also profit, almost everyone would be happy.
I gave my thoughts on what I believe to be the real reason behind the cram-down. If the legacy commons are wiped out the naked short outstanding position of the Market Makers goes away. The Market Makers do not have to cover the COUNTERFEIT SHARES.
Thoughts Please?
Link to my reasoning: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171696080
I appreciate Chessmaster and his thoughts on this subject.
Quote “Great question! Of course, we dont know how/when/if that will be resolved. However, the brokerage firm(s) which delivered (fake, phantom shares) should be liable.” End of Quote.
Link: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171697011
Was an ‘Appropriations Clause’ claim saying that FHFA being funded outside of the Congressional appropriations process is a violation of the Constitution in one of the lawsuits? What became of this?
Before the theft of the Undocumented Purchase, the plan is to cram it down.
The limited damage is laughable! The lawsuits are based on the third amendment going nowhere.
Barron, has it right!
The Senior Preferred Stock Purchase Agreement is not a law: The SPSPA is an illegal contract: The Charter Act is the Law.